In Order for a Liquidated Damages Clause in a Contract

question 21

True/False

In order for a liquidated damages clause in a contract to be upheld,the actual damages must be difficult or impracticable to determine.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the efficiency with which a company utilizes its resources.

Explicit Costs

are direct, out-of-pocket payments for expenses incurred by a business or individual.

Revenues

The total income generated by a company or organization from its activities, before any expenses are subtracted.

Economic Profit

The difference between the total revenues received by a business and the total opportunity costs of all resources used in the production.